Public service minister Katy Gallagher has promised to continue reforming the APS to combat conflicts of interest, and reduce spending on external consultants.
Gallagher appeared at senate estimates with senior staff from the Australian Public Service Commission (APSC) to answer questions about integrity and capability in the public service.
The use of external consultants came under particular scrutiny as an area of potential conflict.
The consultancies inquiry has shown the potential for insider information to be exploited by trusted governmental insiders.
Deputy commissioner for APS Academy and Capability Subho Banerjee said it was clear there were government contractors that were not managing conflicts of interest to the standard the APS itself does.
“It’s become clear as these issues have been ventilated there are a range of clients on the books of some of these entities that have clearly disparate interests. Exactly how you manage that through government contracting is very much on our mind,” he said
“There is a reasonable point that this is systemic in terms of procurement and contracting more broadly.”
As well as being bad for policy outcomes, this has put pressure on the budget that could be used for government services.
A 2023 audit of government spending found the Morrison government had spent nearly $21 billion on external consultants. This is about a third of total spent on the public service, or enough to employ about 53,000 additional staff.
As of 30 June 2023 170, 332 workers are currently employed under the Australian Public Service Act.
This represents 6.9% growth, or 11,041 employees.
Gallagher said she wanted to continue to grow capabilities to keep “core work” within the APS.
“We’ve got the strategic commissioning framework in place which aims to provide agencies clear direction or advice on when they are making decisions about whether they’re going to go out and get external advice, or whether it should be done in-house,” she said.
“Obviously, entities are accountable for their own procurement decisions, so it’s advice they have to interpret through their decision-making.
“The guidance around managing conflicts of interest is pretty clear, but if there are other areas we should be looking at to enhance that, we’re open to that conversation.”
Part of reducing government reliance on consultants is building internal consulting capability.
Allocated to creating an in-house consulting arm of the public service in last year’s budget was $10.9 million.
Chief consultant Andrew Nipe said they currently had 20 staff and were engaging with all arms of the public service on how they can be most effectively used.
He said it was important to learn from the failure of other publicly owned consultancies by establishing demand for their services before they launched into high gear.
“The UK policy hub, colloquially called ‘crown consulting’, was one of the areas we looked at … there were a couple of big differences,” he said
“While we’re still in this initial stage, we’re not charging which gives us a softer run-in.
“We’ll be working with our colleagues across the APS to identify where they think we’ll be adding the most value for them, and that’ll be a mixture of our capabilities and their needs.”
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